Inheritance and benefits

dprovan

Hi, I posted a message a while back asking about how an inheritance would affect benefits, this situation has now developed and I would appreciate any advice anyone can offer.

My Mother died in September and me and my brother (her only family) have been left £31,000 each. I work so there are no complications.

My brother however has learning difficulties and suffers from quite sever mental health difficulties. The payment is from my mums pension and a death in service grant. Therefore was a discretionary payment to us (in the sense her employer decided to give the money to us rather than pay it into my mums estate, whereby it would have been swallowed up in debts owed).

Because the moey goes directly to us this has to be declared, my brother has been told he will receive no benefits (approx gets £500 per month presently plud DLA (which he will still get approx £100 per month)) until the money he has received falls below a certain level, either £4000 or £13000 he can't recall what he was told.

I have worked every day of my adult life over 20 years so I don't believe on anyone getting a free ride. However he is really incabable of working because of his abilities/mental health. I use the word cautiously but this seems unfair.

I have chatted with our solicitor who has advised us not to ask my mums employers to pay all the money to me, the solicitor feels we run the risk of the employer changing mind and paying money into the estate so we both loose out.

Do we have any other options or does he just have to accept the situation? Should I be speaking with a financial adviser, ie is there any reason to?

Thank you for taking the time to read this.

Bossyboots

I don't want to appear uncaring but the benefits system is surely there for people in need. With several thousand pounds in the bank, your brother will not be in financial need for a while. If he is not going to use the money for his living expenses, what will he use it for. It doesn't seem reasonable for the tax payer to support him while he has money to do that for himself. I really cannot see what is unfair about him being asked to pay his own way while he can.

The last person I came across in this situation had £28,000 and lost all her benefit entitlements until she dropped below the limit.

What I would say is that you need to double check the savings limits so that once he is slipping under them, you can help him apply for benefits to which he would then be entitled. For instance, council tax benefit is available with £16000 in savings. Watch the interest though because this will push it over.

Tim_L

deleted because advice not actually relevant - I missed the point about debts to your mother's estate... sorry.

dprovan

bossyboots, I really do see your point, its a view not too far away from my own should it not be so close to home. In answer to what would he spend it on if not daily living, I guess the simple answer is the same as any of us, myself included, would....

As stated he is unable to hold down a job because of his disabilities, we aren't talking about someone who could earn a wage to live off but chooses not too.

The way I look at it he was judged as unfit to work (hence DLA) so was compensated (benefits) to give him a standard of living so why should he now use the lump sum he has been given to support him, I don't have to,, the only difference between us is that I am able to work he isn't..

Im not sure if I have made myself clear or not.

Anyway any views are appreciated, thank you for taking the time to respond

Bossyboots

Let me turn this round. He is still going to get his DLA. He was not compensated for not being able to work, he has been given benefit payments to enable him to eat and pay his bills. With £31,000 he is more than capable of paying for his own standard of living without the tax payer having to do so. The benefits system is there for people in need. Your brother will not be in need with that lump sum in the bank.

Ted_Hutchinson

GENERAL RULES ABOUT CAPITAL
This IR guide about Deprivation of Capital will take you through how the matter will be viewed by a Decision Maker.{I know this is IR but they follow the same rules as DWP}
The threshold for Capital will be raised in April to £6000 which won't actually affect this situation immediately but may be help others.

Purchases which are required for his medical needs or immediate housing repairs would be viewed differently from expenditures which were not immmediately necessary.

It's a pity the solicitor wasn't prepared to reword the will so that the capital was put in trust to enable you to provide the support which he will be need in the future.

dprovan

Ted,

if I understand this correctly the problems were

a) there was no will.
b) the money we received were discretionary payments from my Mothers employer in respect of her pension and a death in service payment. Therefore her employer decided how this was payed eg they could have re-directed it to my Mothers estae, in which case we would have lost most of it... ironically my brother may have been better off as we could have then put it in some kind of trust (I am guessing now).


thanks

dprovan

thanks for the advice.

We have had conflicting advice, I have spoken with a financial adviser who suggested that there was no way around this and it would have to be declared. My brother on the other hand has spoken with a FA who suggested bonds as a way around this (my brother could of course have been confused re advice).

However his social worker/councils financial adviser have been very pushy in saying he must declare and to do this asap. I think to prevent further worry for my brother we will just progress with this.

Thanks for your help.